LIQUIDITY

LIQUIDITY..................................................................................................................................... 1
Lesson 1 : 3 Candle Formation.................................................................................................. 2
Lesson 2 : Market Structure....................................................................................................... 4
Lesson 3 : Impulse and Retracement........................................................................................ 7
Lesson 4 : Timeframes & Structure........................................................................................... 9
Lesson 5: Strong Points & Weak Points................................................................................. 10
Lesson 6: Break of Structure....................................................................................................13
Lesson 7: Internal BOS............................................................................................................. 15
Lesson 8 : Premium, Discount & Equilibrium.........................................................................18
Lesson 9 : Trading Ranges....................................................................................................... 20
Lesson 10: TR Trap Variations................................................................................................. 25
Lesson 11 : Points of interest...................................................................................................36
Lesson 12 : Order Flow............................................................................................................. 47
Lesson 13: Entry Methods........................................................................................................ 50
Lesson 14 : Continuation Trades............................................................................................. 63
Lesson 15: Hedging...................................................................................................................65

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Lesson 1 : 3 Candle Formation

A 3 Candle Formation, also known as Swing Highs and Swing Lows, is a very important piece of Price
Action that will be crucial for you to train your eyes to see as they will tie into future topics. Their purpose is
not necessary for you to understand right now, but being able to identify them will be vital. So let’s get into
the key components of what creates a valid 3 Candle Formation.

**Key Components of a 3CF**

So as the name suggests, a 3 Candle Formation requires 3 Candles. Two key things to remember is that
Candle #2 will always be the Highest/Lowest Candle out of the 3, and the colours of the candles do not
matter. All that matters is the formation.

**Swing High:** For a Swing High you want to see Candle #2 as the Highest Candle of the 3.

**Swing Low:** For a Swing Low you want to see Candle #2 as the Lowest Candle of the 3.

It’s as simple as that. Let’s take a look at a diagram of what that looks like so you understand what I am
describing. As you can see in the diagram, Candle #2 is the Highest Candle of the 3 for a Swing High and the
Lowest Candle of the 3 for a Swing Low. Now that you have a basic understanding of what they look like,
let’s take a look at some real chart examples.

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Lesson 2 : Market Structure

We are going to go through the very basics of Market Structure. It is very important that in this lesson, you
understand that this used on its own or ANY topic used on its own for that matter, will not work
consistently. We are going to blend everything together so all you need to understand right now is the basic
concept of Market Structure and you will see as you progress with this course, how it ties into other topics.
We are now going to show you how the 3 Candle Formation which you previously learned, ties into Market
Structure.

In Bullish Market Structure we will see a series of HH’s and HL’s. The HL’s are protected and then price will
drive higher to create a new HH. When Price creates a new HH, that is a BOS to the upside. If price breaks a
HL, that is a BOS to the downside, and in the right context could shift the Trend from Bullish to Bearish.
In Bearish Market Structure we will see a series of LL’s and LH’s. The LH’s are protected and then price will
drive lower to create a new LL. When price creates a new LL, that is a BOS to the downside. If price breaks a
LH, that is a BOS to the upside, and in the right context could shift the Trend from Bearish to Bullish.

NOTE: Until the HH has been made, we cannot say we have a confirmed HL yet and until the LL has been
made, we cannot say we have a confirmed LH yet. This is important.

Bullish Market Structure Example

Bearish Market Structure Example

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Tying in the 3CF

Now that you understand the 3 Candle Formation, it’s time to learn one of the important ways we use it,
and one of the things we use it for is Market Structure. You may recall from the lesson on 3 Candle
Formations that they are also known as Swing High’s and Swing Low’s. That is because once we blend it
with Market Structure, they will now become what we call our “Swing Points”. These Swing Points are the
key areas of Price Action that define the Market Structure. Let’s take a look at the previous examples of
Bullish & Bearish Market Structure chart examples, but now identify the 3 Candle Formations to find our
Swing Points.

Bullish Market Structure Example

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Bearish Market Structure Example

As you can see, now the 3 Candle Formation has a purpose, which is to identify our Market Structure Swing
Points. You might also notice that when price creates a BOS, it’s breaking above/below the 3 Candle
Formations and not protecting them. They are the Swing Points. So for a valid BOS, price needs to break a 3
Candle Formation.

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Another question you may ask is if we need to see a BOS with a Wick or a Body. For a High Probability
break, we prefer to see a body close above a Swing High or a body close below a Swing Low. It can still be a
genuine break with a wick but it’s just less convincing and less trustworthy compared to a body break.

Lesson 3 : Impulse and Retracement

It is important to always know in what phase the price is at a certain moment.

For Example:

If the market is in an uptrend on HTF and you just created an HH. The price has most likely established a
new bullish TR, so in theory, the price has finished its impulsive phase and now
start your pullback phase . On Daily and Weekly you will be bullish but you can trade the retracement on
shorter timeframes like 1h once the price starts to show a change in the 1h structure from bullish to bearish.
You will be trading a daily pullback, but typically those pullbacks are several hundred pips, so it is often
worth taking the risk and trading Counter-Trend (CT).

In the example below you can see how our Swing structure is the black line and the blue one is the intraday
price action. It shows how what in Daily is a retracement, in a lower TF (1h) it can be intraday shorts with
TP areas in discount of our daily TR. Once in POIs of the daily TR, we will wait for the lower TF to go
Pro-trend. Swing analysis with intraday entries gives a large Risk-Reward (RR). This applies to all TFs. 4h
structure and entry with a 15m structure or less.

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Example on the Daily TF Swing Chart trading a pullback

All the blue dots are daily structure points. We see price making a BOS and creating a new HH. We know by
now that once the price makes a BOS, a pullback should be anticipated. As shown in the image the 1hr made
BOS, which lets us know that price is going to make a pullback. By knowing a pullback is happening we can
take CT ( counter trades ) from the 4 & 1h structure until we reach the daily POI. Once the price reaches
CT TP we will look for PT ( pro trend ) long opportunities on the LTF.

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Lesson 4 : Timeframes & Structure

We all know the saying "The market is Fractal" because what is shown in a Daily chart, we can also see in TF
of Minutes or even in Seconds. Large Timeframes like Daily, Weekly, or Monthly will give you your
long-term Bias and 4h or 1h price action will give you your short-term Bias and are the ones you will
probably see most often since those TFs will help you find the POIs you will be looking to enter trades with
for a intraday or Swing TP.

Time knows no Price & Price knows no Time

The reason we use LTFs in conjunction with HTFs is because the same concepts work across all TFs. That is
because the price does not know time and time does not know price. Order Flow only understands Order
Flow. What this means is that the same behavior that you see in Daily TF, you will also see in Minutes and
even in Seconds TF.
We have all heard that "small timeframes are just Noise". Yes, it's just “Noise”, if you don't know how Order
Flow and Market Structure work.

HTF vs. LTF

Something important that we must learn to correctly identify is our largest structure, because for example; If
we see that we have a bullish Daily and Weekly structure and the price is creating an HH, we expect a
pullback at some point.
When the pullback begins, in TF of 4h or 1h it will seem that it is a trend change and many get confused
there it is key to interpret the TR and the structure so as not to get confused. The 4h-1h pullback will only
be a correction to Discount prices, to reach POIs and mitigate them and then continue with its HTF trend.
That is why multi-timeframe analysis is crucial. Combining our understanding of Structure and Timeframes
will help us to have a solid foundation to anticipate what is most likely to happen in the market.

3CF

A 3 Candle Formation is a SH, WL, SL, WH (QM) when broken down into a lower timeframe. This is why
the 3 Candle Formations work as Swing Points and Structure. A Swing Low is a Bullish QM when viewed
on a Lower Timeframe and a Swing High is a Bearish QM when viewed on a Lower timeframe. This also
works the opposite way, if you see a QM then it means it’s a 3 Candle Formation on a Higher timeframe.

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Lesson 5: Strong Points & Weak Points

Strong Points:

They are strong structural points that, when formed, create an impulsive movement that results in the
breaking of Weak Points (previous Highs or previous Lows) and that, once they create new Highs or Lows,
create a new Trading Range (TR). Once we can identify our TR we will have a solid base on which we can
operate.

Weak Points:

These structural points are those that will serve as TP once we enter into a Strong Point trade. They are
called Weak Points as they are broken by Strong Points.

HTF Narrative:

By understanding our HTF narrative, along with our Strong Points and knowing what phase the market is
in, we can get a solid idea of what is happening. Always looking at the structure of the larger Timeframes
will prevent you from getting lost in the price action of small timeframes. When you feel confused about
small TFs, always look at the bigger picture on HTF.

Strong Highs & Weak Lows

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Strong Highs are those Lower Highs (LH) that form in a bearish structure and when formed create new
Lower Lows (LL). In those areas of Strong Highs, we will find most of the time our points of interest for
shorts and our TP will be the IRL and the Weak Lows. ( For every strong High there is a weak Low ).

To be considered a Strong High it must do the following:

Must cause manipulation and break structure.

Strong Lows & Weak Highs

They are those Higher Lows (HL) that are formed in a bullish structure and that when formed break Weak
Highs and create new Higher Highs (HH). In those areas of Strong Lows, it is where we will find most of the
time our points of interest for longs and our TP will be the IRL and the Weak Highs. ( For every strong
LOW there is a weak High).

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To be considered a Strong Low it must do the following:

Must cause manipulation and break structure.

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Lesson 6: Break of Structure

The Breaking of Structure (BOS) should always be considered as the breaking of a Weak High or a Weak
Low, and this applies to all TFs.

When we are identifying or mapping the structure, it is important to identify a true BOS since it will depend
on that if at the moment we are analyzing the market we will be seeing the correct price direction or not.

To take into account a BOS as a true BOS and not a False BOS, we must always wait for it to be a break of a
Weak High or Weak Low and preferably a break with a candle body. Sometimes we will be able to take into
account a BOS with a wick, depending on the reaction and the speed with which the price reacts after seeing
the supposed BOS at that moment. Timeframes will often depend on this because what in 4 hours is a wick,
in 1 hour will be candle bodies. This applies to the TF of minutes as well.

Valid Bullish BOS

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Valid Bearish BOS

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Lesson 7: Internal BOS

This Internal BOS (iBOS) is one that occurs within the HTF structure but is only noticeable in LTF. This
type of BOS will help us to have LTF entries using HTF analysis, which will result in our SL decreasing and
our Risk Reward increasing. drastically. For there to be a trend change in HTF, there must first be a trend
change in LTF.

For example:

Within the Daily range, a BOS will be given on the 1h TF first and for there to be a BOS in 1h, there will be
a BOS in 15m. A BOS will accrue in an LTF first before the HTF makes a move.

One important thing to keep in mind with market structure is to apply logic to what the price is doing at the
moment.
There is a logical way in which we can anticipate a trend change in the market before it actually happens,
and that is by observing the willingness of the price to create new Highs or Lows. It is super important that
you understand this and practice it yourself by backtesting the charts. In the example below the black line
represents HTF and the blue line LTF.

Example:

HTF can be Daily and your LTF will be the 4h-1h structure.

HTF can be the 1h structure and LTF m15-m5.

HTF can be the 5m structure and the LTF can be m1.

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Bearish to Bullish Trend change example

If the price does not break a Low, the most LOGICAL thing is that it breaks a High.
But for it to be a valid structural change, a Strong Point must be broken. If the High with the green dot, can
not create a new Low then there is a high chance it can be a change of trend. So there are two possible
outcomes.

The price to continue its down-trend, taking out the red dot low and then creating a new Low (the blue
dotted lines ).

The price to continue its up-trend, taking out the red dot strong High and creating a new High ( the red
dotted lines ).

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Bullish to Bearish trend change example

If the price does not break a Low, the most LOGICAL thing is that it breaks a High.
But for it to be a valid structural change, a Strong Point must be broken. If the Low with the green dot, can
not create a new High then there is a high chance it can be a change of trend. So there are two possible
outcomes.
The price to continue its up-trend, taking out the green dot low and then creating a new High (the blue
dotted lines ).
The price to continue its down-trend, taking out the red dot strong low and creating a new Low ( the red
dotted lines ).

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Lesson 8 : Premium, Discount & Equilibrium

We are traders, we exchange one thing for another and we pocket the difference whether negative or positive.
In this profession there are only two methods of winning; buy low or sell high. As traders, our job is to find
the best buying opportunities and the best selling opportunities and we should not waste time looking for
deals that are not worth it. If we must focus on only buying very cheap and selling as expensive as we can,
then how do we know what our best selling or buying opportunities are?

For that we are going to use the Fibonacci, but not as used by the vast majority of traders who operate with
Fibonacci.
Most traders use the Fibonacci because it helps you see what percentage of the last push is going to retrace
the price.
The difference is that Fibonacci traders believe that the price went up or down because it bounced off a
Fibonacci level like 61.8 or 78.6 (Golden Ratio). But the truth is that it is not so. The reality is that our POIs
are usually located in the areas where these Fibonacci levels are, and most people do not know what they are
and the logic behind them.

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Bullish P & D

Bearish P & D

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Lesson 9 : Trading Ranges
The Trading Ranges in a few words are your "area or range of work" in which we are going to focus our
attention and define our POI in the best areas for shorts or longs (Premium & Discount) In order to enter a
trade with the best positions. For example, the simplest explanation about a TR in a bullish structure is
where a Strong Low begins and were a Weak High ends, that is It. It is the last valid bullish impulse that the
price has made by breaking the last high. It is basically where you will measure with the Fibonacci to know
which area the price is in.

When to update your TR:

Every time the price creates a new valid structural point you must update your TR. This is probably going to
be a bit confusing but believe me, once you understand Trading Ranges, you will start to have a very
different view of the market. And this at the beginning can be very repetitive, but it is for the sole purpose
that you understand it well, because as we go more advanced there will be no need to highlight that it is a
Strong Low & Weak High, a BOS etc. Afterwards, just by seeing certain lines on the chart you will already
know what they mean and the purpose of each one and everything will be much simpler and more intuitive.

Explanation:

Every time the price creates a new VALID High you must update your TR and look for a POI in Discount

Every time the price creates a new VALID Low you must update your TR and look for a POI in Premium.

Let's break down this image:

This strong low is our base for our first TR.

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This weak high is the end of our first TR.

Once this strong low makes a new high, we create a new TR. Which is also the start of our second TR.

This weak high is the end of our second TR.

The start of our third TR.

The end of our third TR.

TR Pro Trend

A Pro Trend TR is the one that we will use to operate in favor of the trend.

For example: If we are in a Bearish trend and we are seeing the structure in 4h our TR will be the tip of our
Strong High and the end of the impulse, which is our Weak Low ( the end of the TR ). And then will wait
for a pullback into a POI in the Premium Zone.

NOTE : A TR is not defined until it is clear that the price has finished its momentum and started to pull
back, since many times you will think that the TR is already defined, but if the market does not start its
pullback, it can continue its current trend even more.

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TR Counter Trend

A Counter Trend TR is the one that we will use to operate against the trend of our main TR.
It's important that you understand this concept perfectly well since it is the one that will help us to be able
to operate with the LTF BOS in the Strong Lows or Strong Highs and that will allow us to have those high
Risk Rewards.
The TR CT will be more noticeable on smaller TFs (LTF) than the TF of our main TR (HTF). This TR is
going to help us a lot to be able to trade ONE PAIR ONLY and get the most out of each movement, be it
Swing, Intraday, or Scalp.

Let's break down the image below:

Suppose that the price is in a bearish structure in 4h and you entered the sale at the first Strong High. Now,
the price reaches the next Weak Low and you close partials because your Weak Low is your TP Swing.
After it touches your TP, the price breaks the Weak Low creating a new LL, and starts its pullback from 4h
to Discount Zone of your 4h TR. You can operate that pullback in a lower TF waiting for a BOS in LTF like
15m and once you have a BOS in LTF, now you have a TR CT that will help you enter the Discount zone of
your TR CT to operate a Counter-Trend intraday.

● We are in a Pro Trend short here.

● Price hits our Tp here ( weak low ).
● Price creates a new LL and now we wait for BOS to happen on the LTF so we can long intraday
until we reach 4h TR Premium.
● Once price BOS we create a new TR CT ( blue dots ).
● Then we wait for our TR CT to come into a POI in the Discount area to go long.
● 6 .This is our TR CT final TP ( 4h POI in premium )
● Here we can look for a re-entry to go Pro Trend once an LTF TR PT is created.

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Bearish TR Identification

At the beginning of a Bearish Trading Range, we are going to see a Strong High. At the end of a Bearish
Trading Range, we are going to see a Weak Low. That Weak Low formation is going to let us know that our
Bearish Trading Range has been confirmed.

NOTE : A Strong High will always form a Weak Low.

Once an SH is formed, an opposite BOS needs to happen ON THE SAME TIMEFRAME to confirm the
trading range

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Bullish TR Identification

At the beginning of a Bullish Trading Range, we are going to see a Strong Low. At the end of a Bullish
Trading Range, we are going to see a Weak High. That Weak High formation is going to let us know that
our Bullish Trading Range has been confirmed.

NOTE :A Strong Low will always form a Weak High.

An opposite BOS needs to happen ON THE SAME TIMEFRAME to confirm the trading range

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Lesson 10: TR Trap Variations

Now that you understand how to identify a Trading Range, it’s now time to learn what the common traps
are INSIDE of the TR ( Your area of work ). Having the ability to understand these traps and identify them
will allow you to anticipate where the market is likely to draw to and it will teach you how to approach
certain situations. We recommend that you focus on the LOGIC of the TRAPS at the beginning and not try
to copy and paste the variations on the charts. The variations that the price will make will depend on several
factors such as the structure, the creation of liquidity, and Inducements.

NOTE: Without the proper understanding of Liquidity these TRAPS will be hard to understand. These
TRAPS are an OBJECTIVE way of seeing Liquidity, SMT, and inducements. You can decide to see the
market in the way shown in CREATION or in T1, and T2. Regardless of your opinion our TR is the main
framework that allows us to know where we are in the market or as mentioned " Area of work ". This will
take time to train yourself, so be patient with your process and practice.

TR Trap Type 1

To identify Trap Type 1, you want to see a BOS, followed by a Retracement, and then a BOS once again.
That Retracement leg is going to be the Trap. There are 2 variations of this as the Trap can sometimes form
before Price takes out the external and sometimes it will form after Price takes out external, but the same
logic applies. Let’s take a look at a diagram to show how this looks and then explain why this is such a deadly
trap. I will label the diagrams as Variation 1 & Variation 2 to differentiate the variations of this Trap.

Bullish Trap Type 1 ( V1 )

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Bearish Trap Type 1 ( V1 )

Bullish Trap Type 1 ( V2 )

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Bearish Trap Type 1 ( V2 )

TR Trap Type 1 Logic

So what makes this a trap? The reason why this is a Trap is because the large majority of traders are going to
try and Buy/Sell from this Price Leg. So there are stop losses, as well as protective Buy Stops/Sell Stops
resting above / below. This is because they are trading based on Market Structure alone.

In a Bullish Scenario, they see a HH, HL and another HH, so they expect that recent HL to hold. In a
Bearish Scenario, they see a LL, LH and another LL, so they expect that recent LH to hold. After it fails,
their stop losses will be hit and Buy/Sell stops have been triggered and price will reverse again leaving them
in loss.

On top of all of this havoc they now believe since that leg was broken, that the market has changed trend.
Now they will get stopped out once again since they have the wrong directional bias. As you can probably
tell by now from this description, just how deadly this trap really is.

TR Trap Type 2

To identify Trap Type 2 we have to understand what is known as a “Failure Swing”. A Failure Swing is when
Price fails to create a new Structure High or Low and then breaks structure in the opposite direction.
Nothing is 100% in the market but this is the signal and we can then anticipate that the market is forming a

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Failure Swing. This can happen whether there is Internal Range Liquidity in the Trading Range or not. We
will call this Variation 1.
For Variation 2, this is most likely to occur when there isn’t any Internal Range Liquidity. The reason is that
Price needs a reason to go somewhere, so if there is no liquidity, the market has to engineer it.
Understanding this will teach you how to approach a Trading Range when there isn’t any Internal Range
Liquidity. This is still considered to be a Type 2 Trap since the market will create a series of failure swings
before reaching an area of significance such as an HTF POI and finally reverse.

Bullish Trap Type 2 ( V1 )

Bearish Trap Type 2 ( V1 )

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Bullish Trap Type 2 ( V2 )

Bearish Trap Type 2 ( V2 )

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TR Trap Type 2 Logic

So what makes this a trap? In Variation 1, there are Buy/Sell stop orders above/below the red annotated
Trap. The market then triggers those pending orders and reverses, leaving those traders in loss. Once that
High/Low has been taken out, many traders will believe the trend is changing since Price created a new HH
or new LL, when all it is, is a stop hunt. So they will attempt to trade in the wrong direction and get stopped
out.

For Variation 2, it’s pretty much the same as I explained earlier. Price will engineer liquidity and that
liquidity will have Buy/Sell Stops resting above/below it, this is the area annotated in red. The market will
then tap into that HTF POI and then reverse, leaving them in loss. Those unaware of where Price is coming
from will attempt to continue trading in the direction it has been creating the liquidity in, and it will take
out those traders stop losses.
So once again they take out both sides of the market before going in their intended direction

Trap Type 1 : Chart Examples

Bullish Trap Type 1 ( V1 )

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Bullish Trap Type 1 ( V1 )

Bearish Trap Type 1 ( V1 )

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Bullish Trap Type 1 ( V2 )

Bullish Trap Type 1 ( V2 )

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Trap Type 2: Chart Examples

Bearish Trap Type 2 ( V1 )

Bullish Trap Type 2 ( V1 )

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Bearish Trap Type 2 ( V1 )

Bullish Trap Type 2 ( V2 )

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Bearish Trap Type 2 ( V2 )

Bullish Trap Type 2 ( V2 )

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 Lesson 11 : Points of interest
In this lesson, we are going to cover Point of Interest, or POI for short. A POI is a Price Level where we can
expect the market to give a reaction from, an area where we can expect a setup to form and can also be where
we can potentially execute a trade. The main issue people have with POI’s is that there can be so many of
them visible on the chart and the majority of people don’t know which POI to choose. That’s why we must
have some rules behind the way we select them, to ensure we give ourselves the highest odds possible. Let’s
go through some of those rules.

POI Rule Set :

RULE 1: A High Probability POI must be selected from the Higher Timeframes. Depending on what TF
you on , choose a POI in a higher TF.

RULE 2: A High Probability POI must have liquidity resting above it if you are looking to Buy, and below it
if you are looking to sell. This gives the market a REASON to tag into your POI and it also gives the market
a REASON to reverse from your POI.

RULE 3: A High Probability POI must be unmitigated.

RULE 4: A High Probability POI is the closest POI to the liquidity. In the topic of Liquidity, you can see
how quickly they can cause those manipulations, so it’s most likely they will be very quick to reverse. So if
your POI is not the closest one, it’s likely you will miss the move.

POI mitigated & unmitigated:

This is one of the rules for valid POIs. IT MUST NOT HAVE BEEN MITIGATED FOR A POI TO BE
VALID. The more times an OB is tested means that there are no more "SM" orders within that POI, and the
more likely it is that it will be invalidated.

Sometimes the market will mitigate the base of your POI and then come back and mitigate 50% of the POI.
That usually happens when you enter the opening of the POI and then you put Break Even and then the
price returns to 50%, take you out of the market in BE and then continue where you had planned. If you
enter a trade and then the price takes you out on BE, you can enter again at 50%. But if the price gives you
entry into the base of your POI and goes to where you had thought you should have already closed partials
and if the price returns to 50% of the POI, then there is very little chance that it will respect that POI again
and the best thing is to forget that Set Up since it does not make sense that the price mitigates your POI go
to your TP and then return to 50% and return to do the same.

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Order Block

An Order Block will always be the start of a strong push. That tells us that this momentum has been created
by "SM", so once we see that "SM" entered the market and that is when we will wait for a mitigation to enter
in the same direction. That is why we should always wait for a BOS to increase our odds.

Bullish Orderblock: Is the last down Candle/Candles before the up move. I say candles as plural because the
same consecutive colour candles are just one solid candle on the HTF.

Bearish Orderblock: is the last up Candle/Candles before the down move. I say candles as plural because the
same consecutive colour candles are just one solid candle on the HTF.

For an Orderblock to be valid for us, it MUST take out Liquidity. This gives it purpose. However on a HTF,
you will see that a single solid orderblock does not take out liquidity, thats why you need to go down to LTF
to see if that orderblock took some type of liquidity. Typically when you drop down to an LTF you see
multiple same color candles that are just one solid orderblock. The images below will show some examples.

You can mark out the entire candle if you like, however, the majority of the volume is in the body so for me
personally I mark it starting from the body. Just be aware that there will be times when it doesn’t tap the
body. So it’s a personal preference.

Bullish OB

What this basically means is that, in the case of an uptrend, an Order Block must break a Weak High and
then return to mitigate an OB and continue its uptrend. An OB that has Liquidity before being mitigated is
even better.

BOS
Liquidity sweep from the previous low
IRL
Returns to mitigate the OB

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Chart example: Bullish OB

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Bearish OB

In a downtrend, the market should break a weak low, then pull back to Premium, sweep the IRL, and
mitigate an OB to continue its downtrend.

Chart example: Bearish OB

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Input methods with Order Blocks

Entry type 1 has a higher probability of being entered by the price, but you have a larger Stop Loss. Entry 2
is at 50% of the OB since many times within the OB there will be an inefficiency that the price, when filling
it, makes the price action efficient and from there the movement occurs. This entry makes you have half the
SL of entry 1, but the price is less likely to hit. There it will depend on you to enter 1 or 2.

Breaker Block

The Breaker Block is simply an Orderblock that was not respected, so when the price breaks through the
Orderblock, the market can return to it on the other side and use it to make its move. The Breaker will
typically be found in a specific area of the structure. As you can see the Breaker is usually found when price
creates a BOS.

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Bullish Breaker Block

Bearish Breaker Block

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Mitigation

In order to understand why OBs are such a price magnet, we must understand mitigation.

Financial Risk Mitigation: Also known as risk reduction or loss control. It focuses on limiting the
possibilities and consequences of a financial risk, seeking especially to reduce the severity of the losses that
could occur. Inside an Order Block, many things happen. Within an OB there is inefficiency in the price,
there are sells or buy orders (depending on supply and demand), but there is also "stuck" money that "SM"
must mitigate in order to close its positions in Break Even and activate new ones. orders at those specific
price points. Let's give an example of a Bullish mitigation. The Bearish will be completely the opposite. It is
really, really important that you fully understand mitigation so that you understand why and how
manipulations that wipe out market liquidity are created and how NOTHING when it comes to market
movement is random.

1. Above these Highs there is liquidity.

"SM" will buy to be able to raise the price
and be able to take the liquidity that is on top.

2. Where the bullish candle "SM" opens, it buys to take

the liquidity to later sell, BUT at the time of selling it DOES
NOT CLOSE its purchase operations. "BUY TO SELL"

3. The opening of the bearish candle "SM" SELLS

WITHOUT closing the buys of the previous candle
and when the level where "SM" bought is exceeded
by the sells, THAT is when "SM" begins to be
negative of its buys of the previous candle.

4. "SM" is winning in its sells, BUT it is

losing in its buys, therefore "SM"
MUST RAISE the price to the point at which it
bought. in order to be able to close that
risked capital temporarily so that they
can continue with their sells.

5. At this point, which was where "SM" bought

and then sold, "SM" mitigates its purchased
orders, closes those operations at break-even
and there at that same point SELLS with more

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capital. That is why when the price mitigates an
OB, the price tends to quickly shoot out

Inefficiency

In the market for each buyer there must always be a seller and vice versa. That's when the market always
moves efficiently. When there is an Imbalance in the price it is when there are only buy orders and no sell
orders (or vice versa) and that is what is known as Inefficient Price Action. They are visible when there is an
excess of buy or sell orders and that gives rise to very fast and strong price movements. That has been the
mark of "SM". When the market shows an Inefficient Price Action (INF), just like an OB is like a magnet for
price and has to be filled for the market to move in an efficient way. There will be times when the price will
react on 50% inefficiency, but based on our own experience I can say that most of the time it will fill it
completely. The INF is a pattern of 3 candles in which there is NO CONNECTION in the wicks of two
candles.

This is how price creates inefficiency and how the price goes back to fill that space between the wicks to
make price action efficient. Inefficiencies will NOT ALWAYS be filled, in fact, you will see there are
inefficiencies and OBs that take YEARS to mitigate or fill. Sometimes the INF will partially fill to 50% and
then it will react.

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Chart Examples: Efficient ( Imbalance Fill )

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Hidden Base

Understanding the Hidden Base gives you the ability to see where an Orderblock is on the LTF while
viewing the chart on an HTF. Hence the word “Hidden”. The Hidden Base can also be seen as a refined
version of the Imbalance Fill

Chart Examples : Hidden Base

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Wick

The explanation for this POI is pretty straight forward. It is a Wick that has not yet been tapped into yet.
One key point to remember about the Unmitigated Wick is that the price can use the Open and the 50% of
the Wick. So if price has tapped into the open, the 50% can still be used. There is an OB in the open of the
wick and 50% of the wick.

Please do not forget the Rules for the POI’s and always keep in mind that everything must be combined
together. We cannot just mark any random POI, it has to make sense with the overall context of the market
and combine it with everything.
Chart Examples : Wick

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Lesson 12 : Order Flow

The Order Flow (Flow of Orders) in a few words is the way in which we can observe or interpret
how the IPDA creates and delivers the price efficiently. On the chart, we can see that as a series of mitigations
and efficient price action on ALL timeframes.

For example:
When the market creates an INF and fills it, THAT IS ORDER FLOW. When the price mitigates an OB,
THAT IS ORDER FLOW.
Notice how in the following example, the price closes the vast majority of its INFs and mitigates almost all
the OBs. This is how the IPDA delivers and creates the price. Those who operate with retail concepts call
this Break and retest

Chart Examples : OF

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Lesson 13: Entry Methods
Now that you have a completely different perspective of the market than most traders. We are going to go
deeper into the Entry Phase, which will allow the vast majority of the time to find yourself trading in the
correct direction of the market. Trading is a profession in which we must always try to have the odds in our
favor for the simple fact that we are not always going to win all our trades. That is why we must follow
certain rules or entry patterns that will increase our chances of success.
In order to use these input "patterns" or "models", it is important that you know what type of trader you are,
because by knowing the type of trader you are, you will know what Timeframes to use.

When the market is approaching key levels or areas (HTF POI) we want to monitor LTF price action to see a
change in Order Flow or market structure, which aligns with our trading idea. It is also ideal to observe how
liquidity is created in those key areas to avoid falling into FOMO (fear of missing out) and see certain types
of patterns that will increase our chances of success. The methods we have each of them will have a different
risk.
Direct Entry / Risk Entry
Confirmation Entry
Price Action Entry

Direct Entry

The first entry method will be the most risky because we enter without waiting for any type of confirmation.
To do this we need to mark up our HTF POI. The opening of this HTF POI is what we call a “Key Level”.
Why is this important? It’s important because we are going to choose the POI on the LTF that is LINING
UP with that Key Level. It can be anything, but that is the basic idea of how we refine our POI for a direct
entry. Something that lines up with the Key Level, be it a UW, OB, BB, IMB Fill, or HB.

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Trading Range

HTF Poi

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Poi Refinement

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Chart Example #2 : DE
Trading Range

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HTF Poi

Poi Refinement

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Confirmation Entry

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The purpose of this type of entry is to reduce the risk when entering, since many times we are anxious to
enter the market once the market touches our POI and the market will not always respect the POI.

Chart Example #1 : CE

HTF Poi

Confirmation Setup

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Chart Example #2 : CE

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HTF Poi

Confirmation Setup

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PA Entry

Similar to the confirmation entry, we will wait for the price to tap into our POI, but instead of waiting for a
BOS, we wait for an Engulfing candle formation.

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Chart Example #1 : PA
HTF Poi

Confirmation Setup

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Chart Example #2 : PA
HTF Poi

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Confirmation Setup

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Lesson 14 : Continuation Trades

These types of Trades are the ones that you should focus on most of the time (Pro-Trend). This type of
Trade is about joining the bigger trend using what you have learned so far. When you see that the market is
falling sharply, do not try to enter longs, on the contrary, look for entries for shorts and go in favor of order
flow (towards where the market leads more force). We advise you to become an expert in continuation (
stacking ) Trades by backtesting and that 8 out of 10 trades you take are continuation trades, as that will
definitely be healthier for your account and your psychology.

Bullish Continuation ( PT Stack )

Chart Examples: Bullish Continuation

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Lesson 15: Hedging

We are going to go over Hedging, otherwise known as “Ping Pong”. This is where you will learn how to
execute positions on both sides of the market. Up and down. Reaching this level of "Ping-Pong Trader"
requires a complete mastery of this strategy.

To effectively be able to Hedge or “Ping Pong” we have to understand our obstacles. Very simply put,
obstacles are roadblocks, something in the way. Price isn’t just going to launch or collapse without ever
stopping. There is going to be pullbacks. As you saw in the Stacking lesson, the pullbacks are the reason why
we’re able to continue adding positions and the obstacles cause these pullbacks. Now that you understand
where the pullbacks come from, you can have a better understanding of where the opposite QM will form to
complete your Trading Range because every external range is liquidity potentially feeding into an Obstacle.
So what are the Obstacles? They are Unmitigated Strong Points / POI’s.

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Bullish TR + OBS

Chart Examples: Bullish TR + OBS

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Bearish TR + OBS

In the Bearish Scenario, you can Sell from the Strong High, Buy from the Obstacle, and then Sell again from
the newly formed Range as a “Continuation”. This is how you Hedge / Ping Pong. The same rules still
apply, there must be liquidity feeding into the POI in order to be valid.

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